Mixed ruling in drug firms' secrecy fight

10/4/13 6:11 PM EDT

A federal judge has rejected, for now, much of a bid by two drug companies to keep under wraps reports they submit to the federal government detailing episodes where employees may have violated federal laws or regulations.

Pfizer, Purdue Pharmaceuticals and HHS all argued to keep secret the companies' submissions under so-called corporate integrity agreements, where firms settle criminal and/or civil charges by agreeing to rigorous federal oversight. The oversight includes mandatory reporting on all allegations the company learns of regarding improper activities involving drug sales, marketing, pricing and the like.

Public Citizen sought copies of the reports under the Freedom of Information Act, but HHS rejected the request primarily on the grounds that the records contained sensitive business information that could impair the government's ability to get such information in the future and that the data could create competitive harm. After Public Citizen sued, the drug companies entered the case, agreeing with the Obama Administration that the submissions could be kept secret.

In a ruling Friday, U.S. District Court Judge Beryl Howell delivered a kind of split decision. She cleared Public Citizen to receive some data on which agencies were investigating the firms and the status of such probes as well as the titles and duties of people removed from their usual duties because they were charged with a crime or found to be barred from certain work. She agreed with HHS and the drug companies that some compliance information could be kept secret because disclosure could put the companies at competitive risk.

However, for most of the information in dispute, the judge said the government and the companies had not made the case for secrecy. But she said she would give them another chance.

"I would say for the bulk of the material, she decided to give the government another opportunity to bring forward evidence," Public Citizen's Julie Murray said in an interview.

Murray said she was pleased that Howell rejected arguments by the government and the firms that the feds wouldn't get such information in the future or that companies would be less forthcoming, if that data had to be made public.

"With respect to the 'quality' of the submissions, the government is well-protected by the penalty terms of the CIAs for breaches of the reporting requirements. The CIAs contain extensive monetary and injunctive penalties for violations of the agreement, including exclusion from federal health care programs, the so-called 'death penalty,'" Howell wrote in her 53-page opinion (posted here).

However, Howell also rejected a key argument from Public Citizen: that indications of illegal conduct should never be withheld as confidential commerical information.

"Using its ordinary meaning, the term 'commercial' is not limited only to lawful activities but also extends more broadly to any type of activity bearing on commerce," the judge wrote.

Murray said she was "disappointed" in that aspect of the ruling, saying that it appeared to bolster secrecy "even for information that documents illegal activity." She said the group sought the reports after Pfizer's first corporate integrity agreement appeared not to be successful in keeping the company from committing additional violations. In 2009, the firm entered into a new, seemingly tougher agreement after admitting to illegally marketing drugs for unapproved purposes.

HHS's press office and lawyers for the drug firms did not respond to emails Friday afternoon seeking comment on the ruling.